NU Online News Service, May 17, 1:06 p.m. EDT--An Ohio asbestos injury case has ignited a major legal battle over how deep plaintiffs' attorneys should be allowed to dig into insurers' file cabinets looking for material to aid a lawsuit.
The litigation by the lawn product company Scotts against its insurers has the potential to open "a Pandora's box," said Jeffrey Junkas, a spokesman for the American Insurance Association, which has filed a friend of court brief on behalf of the insurers.
Scotts is appealing a case to obtain coverage decision information, which the insurers argue is privileged under rules providing attorney-client confidentiality.
Employers Insurers of Wasau and Nationwide Insurance Companies were sued by the Marysville, Ohio-based fertilizer firm for bad faith and punitive damages after the companies told Scotts it was not covered for suits filed in 2002 by persons claiming injury from asbestos in Scotts' lawn and garden products.
According to Nationwide's court filings, the company had bought back Wasau policies from Scotts in 1999. Nationwide took over Wasau that year. Nationwide said that when it paid $500,000 for the policies, some going back to the mid 1960s, it secured a release against claims from Scotts.
The insurers argued they had no policies that were covered. Scotts sued to obtain documents, which it said would prove otherwise. Scotts said it was looking for copies of excess layer comprehensive general liability policies issued when it was a subsidiary of ITT Industries.
The issue of how much can be discovered is currently being appealed to the Union County, Ohio Court of Appeals, third District in Dayton.
Key to any decision from the appeals court is a 2001 ruling by the Ohio Supreme Court in an auto injury case, Boone v. Vanliner.
That decision found that in a bad faith action there can be discovery of claims file materials containing attorney-client communications related to coverage issues when they were created prior to denial of coverage.
AIA in its brief told the appeals court that any expansion of the Boone case would chill attorney-client communications and it should not be allowed to go beyond claim files.
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